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Andrew McAfee, Author

Andrew McAfee, co-author of the book Race Against the Machine, thinks that when it comes to the disruption of labor markets because of technology, “we ain’t seen nothin’ yet.” At the MIT Sloan School of Management, McAfee studies the impact that information technologies have on industry, and I recently heard a presentation of his research at Singularity University’s Graduate Studies Program. McAfee contends that we could now be entering a world where automation will cause wages to fall and jobs to dry up.

McAfee’s argument isn’t wholly new, and he explains how fears surrounding unemployment due to technology have been around for 200 years. Famed economist, John Maynard Keynes, voiced concerns regarding automation in the 1930’s and coined the term “technological unemployment.” In the early days of the industrial revolution, many worried that the automation of agriculture would leave everyone unemployed. Of course, Keynes’ vision of a world with little work left for humans never transpired, and his argument has been widely regarded as a fallacy. McAfee, however, tells a convincing story as to why it may finally be time to worry.

To articulate the core of his argument, McAfee draws from the concept of exponential growth patterns. The numbers at the beginning of any exponential curve (1+2+4+8+16….etc) are easy to comprehend. It isn’t until later in the progression that intuition breaks down and human imagination is outstripped by the explosive growth in the doubling pattern. With regards to the digitization of labor, McAfee argues that we may have just entered the “knee” of the curve; the portion of the growth pattern characterized by massive acceleration.

The encroachment of digitized labor into the economic system is now accelerating, and the scope of the phenomenon is as of yet unknown. McAfee admits that much of today’s economic pain is probably caused by the hangover left from the 2008 crisis in the U.S., and the current crisis in Europe. McAfee points out, however, that corporate profits in the U.S. have never been higher and that companies are back to spending; especially on things like IT. What companies are not doing is hiring new employees. McAfee shows BLS data showing that the 2000s were the first decade since World War II in which there were fewer people working at the end than at the beginning. Hiring hasn’t returned, suggests McAfee, in part because technology is being injected into the economy at such a staggering rate that there is a decreasing need for human workers.

The Lost Decade for Job Growth

If the computer era for business purposes has been around since the 60’s, then why is it now in 2012 that we should be concerned? McAfee argues that we are now in an age of unprecedented acceleration, where our experience of the past is no longer a good guide for the future. The comparative advantage of human labor over machines is washing away before our eyes and to illustrate this point, McAfee references the work of Narrative Science, a company out of Northwestern University, which uses algorithms to write stories around simple pieces of data. Forbes now uses this technology to generate the earnings announcements around a company’s stock price, and can even tailor the story to cater to specific audiences. How many journalists could lose their jobs? McAfee thinks it could be more than just a few. McAfee also points to Google’s self-driving car, and IBM’s Watson as good examples of pivotal applications being developed today, that could digitize a sizeable chunk of human labor in the future.

So what are we to do, as more and more jobs are lost to this entirely new species of highly skilled machine? During Q&A some of the students at Singularity University argued that we should re-frame the issue into one of education rather than unemployment. They argued that not all of the jobs in the future are for the robots, but these jobs also haven’t been created yet. We’ll need to find ways to retrain those rendered obsolete. This is no easy task, and one that McAfee argues could cause serious heartache for the economy. For McAfee we are at the cusp of a transition period that will be far more profound than America’s shift from agriculture to industry. Though the future of work is highly unknown, one thing is certain. If you are looking for a forecast of clear skies and sunny days ahead for the industrial labor market, then don’t hire Andrew McAfee as your weatherman.

This story produced in cooperation with SU partner site Singularity Hub